Livonia Partners, a pan-Baltic private equity firm,
together with LHV Pension Funds and Ambient Sound Investments, agreed to invest
in Cgates, a leading Lithuanian provider of cable television and internet
services.

The investor
consortium led by Livonia Partners will invest into a significant minority
stake in Cgates to support growth of the company and further network and
technology upgrades. The transaction is pending regulatory approval.

“In the growing
Lithuanian market, Cgates as a leading player has proven its ability to grow
organically and through acquisitions,” says Mindaugas Utkevičius, a founding
partner at Livonia.

With nearly 300
employees and consolidated sales of €19.5 million in 2016, Cgates is
Lithuania’s second-largest cable network operator. It provides cable and
digital television, fixed telephony and fibre-optic broadband internet to more
than 270,000 subscribers in 18 cities. The Vilnius-based company is currently
owned by the founders of former Cgates’s parent Starman, which was bought out
by Elisa Corporation of Finland earlier this year.

“The new investors
support our strategy of becoming the product leader, strengthening our brand
and the organisation, and seeking further consolidation opportunities. We aim
to become the best in class platform to a wider audience and look forward to
partnering with Livonia for their expertise in this sector,” says Cgates CEO
Petras Kirdeika.

“This transaction
successfully completes the series of steps we have taken over the course of the
past two years to restructure our telecom operations in the Baltics,” says
Indek Kuivallik, the Chairman of Polaris Invest. “Lithuanian market has vast
potential and we are now uniquely positioned to make the most of it.”

The investment is
the fourth for Livonia Partners Fund I, whose strategy is to invest in
medium-sized companies in the Baltics that are well-managed and growing. Last
year the fund acquired Ha Serv, an Estonia-based sauna manufacturer, and
Hortes, Estonia’s leading home and gardening retail brand, and earlier this
year Livonia invested in IT network and security firm Santa Monica Networks in
Latvia and Lithuania.

“This is the fund’s
second investment in telecoms and technology, an attractive sector for
investments,” Utkevičius notes. His partners Rain Lõhmus and Kristīne Bērziņa
formerly held roles with Starman and Lattelecom, respectively. Utkevičius also
welcomed the participation of Ambient Sound Investments, the investment firm
originated by the founders of
Skype.

For further information:

Livonia Partners

Livonia
Partners is a private equity
investment firm based in the Baltics, currently managing €83 million as part of
the Livonia Partners Fund I and the Livonia Partners EIF Co-Investment Fund.
Run by founders Kaido Veske, Kristīne Bērziņa, Rain Lõhmus, and Mindaugas
Utkevičius, its investors are domestic and international financial
institutions. Livonia was partly originated through the Baltic Innovation Fund
(BIF), a common initiative of the Republic of Estonia, the Republic of Latvia,
the Republic of Lithuania and the European Investment Fund.

www.livoniapartners.com

LHV Pension Funds Estoninia

LHV Pension Funds Estonia are one of the largest Baltic pension fund managers
with more than 170,000 clients and €1 billion assets under management. It is
part of Estonia’s financial group LHV, whose shares trade on the Nasdaq Baltic
market.

www.lhv.ee/en/pension/fund-management

Ambient Sound Investments

Ambient Sound Investments is an independent investment vehicle established
in 2003 by the four founding engineers of Skype Technologies. The company now
managers €100 million of its
partners’ assets with a focus on technology-related firms.

http://www.asi.ee/

Cgates

Cgates is one of Lithuania’s largest cable
entertainment and communication companies. Established in 1991, it now provides
cable and digital television, fixed telephony and broadband internet to more
than 270,000 customers in 18 cities.